...and economic factors he did not raise

November 17, 1981

The Atlantic Monthly article on David Stockman has drawn justififed attention to the need for US political leaders to come to grips with the complicated budget process. But more than appropriate fiscal and monetary policy is involved in righting the giant American economy. Finding ways to increase business productivity, after all, remains the key to ensuring present and future prosperity.

After two consecutive quarters of increase, business productivity in the third quarter of 1981 declined at an annual rate of 1.9 percent. Most economists would argue that the outlook for a hike in productivity in the fourth quarter is hardly promising, given the economic downturn.

But what must not be forgotten in all the current talk of slump is the actual contribution that can be made by the individual American worker. There is much that each employee, as well as business firm and labor union, can do to help spur productivity and bring a halt to the persistent stagflation of past years.

Employers, employees, and unions, for example, must find better ways to ensure employee self-management, as well as worker participation, in important decisions involving the work process. In part, that may mean using more teams, rather than relying on the lone worker isolated on some dreary and repetitive task.

Management, for its part, should not overlook the incentive of profit-sharing plans that are linked to increases in output.

Americans also still have far to go (compared to several of their trading partners) in bringing labor costs into line with actual output. Detroit, despite all of its talk about the ''unfair intrusion'' into the US of Japanese auto firms, is still saddled with labor costs of something like $22 an hour, compared to $13 an hour in Japan. Obviously such a wide disparity works against the competitiveness of US cars.

In the long run, however, many economists believe that it is the natural inventiveness of the individual American worker that must be given greater latitude and avenue of expression in a society that has become increasingly ''institutionalized.'' Fortunately, as correspondent Peter Grier points out in a series on ''Backyard Inventors'' appearing in this week's Monitors, the urge to innovate, to build, to create, is still as much a part of the American scene as in the days of Edison and Henry Ford. ''It's always bothered me that there are so many problems, and the solutions are right there among us'' is how one Boston-area tinkerer puts it, adding that ''I've never met a person in my life who isn't an inventor.''

The Reagan administration, and ultimately the American people, must take every step to let that innate penchant for inventiveness and innovation shine forth. When that happens, productivity will rise naturally and inevitably.